Okay, we're gonna get started here in the afternoon track here for transports. Again, Brian Ossenbeck, covering the space for J.P. Morgan. Really excited to have Norfolk Southern here. Mark R. George, President and CEO, Jason Zappi, CFO, Luke Nichols in the audience. You know, clearly there's a lot to get to in terms of just the structure of the industry and how it might change over time. Clearly, there's a transaction in the market, but wanted to start a little bit more fundamental. You guys are still out there running the business every day. Clearly, tough winter, dwell times and parts of the network look a little bit elevated. You know, maybe we can just talk about how the network's running in the first quarter and just go from there. Thanks again for being here.
Thanks, Brian. We're happy to be here with you. I'm glad to be talking about fundamentals because we do spend most of our time running the business, even though it might seem to many of you that we're spending all of our time trying to get this merger across the finish line. We started the year actually really strong in January. Volumes. We were pretty happy with, you know, coming out of the gate. When the winter hit us, that, I guess, was the fourth week in January, that final week in January, it hit us hard in the East. Unlike the West, we pummeled all over the network with three successive storms and deep freezes on top of it. Yeah, it definitely had an impact on our fluidity.
It did create some increased dwell times, and it reduced our train speeds and reduced our service metrics. Just like we saw last winter, we came bouncing right back at the end of these storms. You know, we're in a good spot right now. I'm really happy with, you know, the resiliency that we're demonstrating on the network. I will tell you that in February, you know, that the storm impact and the impact on our network definitely hurt us from a volume perspective. We were running ahead of schedule first few weeks. We went deep into a hole in February compared to our expectations. I would tell you here in March, you know, we've been coming back ahead of our expectations in March. We're kinda, you know, we're feeling pretty good about coming out of the storms.
The only other thing I'd add about the storms, you know, if you think about last year, we talked about, like, 17 or 18 storms that hit us in the first quarter, but those were, like, much more regional or localized. These two storms that hit us really the last handful of days in January, first handful of days in February were really, really widespread, so very, very impactful to the network. You know, having said that, I think we bounced back pretty quickly.
We did.
Yeah. You don't see that much ice in Atlanta or Memphis or any place like that.
Right.
We've heard from others, you know, some of the rough cost ideas of how much this might impact the network on a year-over-year basis. I don't know if you're at a point where you can share any of that, or is it material, you know, to how you experienced versus last year?
I mean, there's definitely incremental costs, cleanup costs. You have a lot of contractors out there clearing trees and helping us bring the network back. You know, there's incremental costs for sure. Probably $0.04-$0.05 of cost.
Okay. Mm-hmm.
Wouldn't you say?
Yeah. That's fair.
Mark, you mentioned that the volumes were looking pretty good, and they were definitely coming in at a pretty good pace. Of course, weather had something to do with that. You don't necessarily have an official, like, market view or target for the year. Like, just where are things better than what you expected in terms of volume, and why was that? Was it service? Was it conversion?
You're talking about the first quarter?
Yeah, the first quarter in general as they progress into Q-
Like we said, it's been lumpy. You know, strong January, weak February from the storms. March has come back well. I would just tell you the overall markets, and Jason, you're gonna jump in here, but utility coal-
Mm-hmm.
It's been good. It's been real good. You know, last year it was good. Data centers help. Nat gas prices, we'll see where those kinda go to. We can talk about the war later. I'm sure you're gonna ask about that. But we're feeling pretty good about that. And honestly, I think our industrial products business has been. You know, we had a really good year last year with industrial products. We saw some good volume growth and, that's continued strong here in the first quarter as well. And intermodal has been weak. You know, we all know what's going on on the domestic side with regard to some of the share shift that's happened.
Mm-hmm.
on the domestic side. You know, international, which is kind of a proxy for imports, has been really soft. Everybody's seeing that, all imports. What do you think, Jason?
Yeah. No, I mean, just put a little finer point on it. I think, you know, intermodal quarter to date, we're down about 6% volume-wise versus where we were. Like Mark said, truly, you know, that's the international story that everybody's feeling there. And then coal, I think that's been not only a good year-over-year story, but just versus expectation. I mean, utility coal volume has really been strong. The only other piece I'd add to what Mark said, in addition to electricity demand and the high natural gas prices, you also have, you know, probably a little bit more favorable regulatory environment. You know, we don't really see any closures on our system in the-
Mm-hmm.
Any major closures in the near future. You know, obviously no new coal-fired plants coming on, but I think you're seeing some delays and closures of existing plants, so.
Yeah.
Right. Were some of those expected to happen this year as you entered? Or they're always kind of in perpetual-
Yeah.
Restatement or extension?
Yeah. I think it's, you know, just continued to move out.
Right.
Yep.
Okay.
I think you heard a lot of those announcements last year where they were kind of aborting plans to decommission coal power plants, so that's good. That's held. You're hearing more chatter when I talk to some of the utilities, more chatter about recommissioning some plants that may have been decommissioned. You know, again, the war may also accelerate some of that.
Mm-hmm.
Depending on how long that lasts.
For sure. We'll get to that in a second. Coal being a bright spot, you know, to focus a little bit more on because I told you don't get that opportunity. Is there anything on the Warrior Met Coal partnership you guys shared a little bit about last quarter, like how that's ramping up, what brought that about? As we think about the competitive losses, you've also mentioned, like are there other ones that we should think about in terms of wins? Because I think CMA CGM was a new service launch. Like, what else is in the hopper in terms of, you know, additional opportunities that you're already working on or potentially could be seeing pretty soon?
you know, Warrior, we had been working on for about two years, working very close with them, to develop a solution for the new mine that they were looking to open where they had alternatives, including barge, which was fairly convenient for them.
Mm-hmm.
We came and worked with them very closely on a rail solution that involves them investing a fair amount of money for conveyor system and us investing a fair amount of money to create more capacity on our line to go down to the Port of Mobile. We both invested that money, and now we're looking. You know, we've already started the service and it's going well. It's extremely high quality coal, met coal, extremely high quality. We think this can ramp up to, what, 6 million tons a year. We're really excited about it. Again, it's a really good partnership that we have with them, and we're really proud of the investment. Like I said, this has been going on, this discussion on developing a solution for over two years.
Yeah, you know, you cited CMA, another again, what kind of solution can we create and deliver for you? We've done that. It's kind of a truck-like solution that we've created there. We're working on others. We've had other big wins in auto, and, you know, I'm not gonna get into details of some of the other negotiations we're deep into, but the team's working really hard. I think what I wanna do is maybe take a second and explain one of the things about a year ago. I talked to our commercial officer, Claude E. Elkins, about the fact that, you know, this industry, maybe we need to think a little bit different about our commercial organization and our structure and the way we do things.
Mm-hmm.
I'd like to see us maybe take a look at more specialized sales folks that are on specific incentive plans like you see in most other industries, and separate that functionality from other marketing folks. Today, people's jobs, or in the past, I should say, people's jobs were kinda co-mingled, you know, doing a little bit of sales, a little bit of relationships, a little bit of pricing, a little bit of marketing. Let's take a look at a more bifurcated structure with specialists, with a sales organization that has incentives.
Mm.
that can help drive more top-line growth. For the past year, we've been building this out, and we are now live with a new structure, and we feel pretty excited about where this could lead in terms of propelling us at a faster rate than we've seen in the past. We can't just keep doing the same things we've been doing and expecting a better outcome. We've gotta try something different. You know, hats off to Ed Elkins for embracing that and driving that. His VPs, you know, they've done a spectacular job leading the organization through that change. A lot of people, hundreds of people's job descriptions were changed. Their compensation structure is changed. I feel like we're gonna start seeing the benefits of that soon.
Yeah. Well, you mentioned 2 wins, 1 against truck and 1 against barge.
Yeah.
usually that doesn't really happen. Are these
Right.
Are these service driven? I mean, the relationship you mentioned is well, but-
Oh, yeah. They're also service driven because, let's face it, we're in a position of strength, which is another reason why this was a good time to do the merger, but it's also a good time. We're able to demonstrate to our customers, "Look, you can trust us. Look at how reliable we are. Look at how resilient we were after the hurricanes, after the winter storms of 2025." They're seeing it, so now they trust us. We have a strong operations team and strong disciplines. Honestly, we're bringing the operations folks into these discussions with our customers. They're vested in it.
Mm.
You know, our chief operating officer, our heads of transportation, they're in the meetings with the customers, and they're vested in it. We're approaching things a little bit different now as more of a team.
Well, we did allude to the conflict in the Gulf, and clearly there's a couple different factors that would play out across the rail networks. Maybe in the short term, how do you size up the impact on fuel? Because obviously it went up quite a bit, and we're now chasing it with the reset. Then secondly, you know, aside from the obvious potential for, you know, impacting consumer demand and sentiment, like, are there any end markets that are particularly exposed? I don't know, maybe there's some NGLs that can be exported somewhere else, like frac sand maybe picks up, like not looking necessarily for a silver lining, but just like the broader impact of higher energy prices for longer.
Yeah. Look, I think it's been 2 weeks pretty much of volatility in oil, that we've seen, and we've still got another 2 weeks before we close out the quarter, right? We know that fuel is already gonna have a very significant impact on our expense. When you think about it, we burn about 1 million gallons of diesel fuel a day. That's 30 million gallons a month. You can kinda do your own math. You know, if the rates go up by $1 from where our expectations were, that's a $30 million headwind. If it goes up by 50 cents, it's a $15 million headwind, for the quarter because of the 1 month in March. Now, we do have, obviously, it's a pass-through mechanism with our surcharge program.
There, you know, you have basically a couple weeks lag before you'll start to see the surcharge take effect in intermodal, and a couple months lag before you start to see it take effect in industrial products. Really, you'll start to see the surcharge flow through here in the second quarter and with full effect in the third quarter. We don't know what the curve is gonna be on oil prices. Just in these two weeks, it's been pretty spiky and volatile. What would you gauge the range for, you know, if you were gonna guide Jason?
Yeah. I'd say on the expense side, you know, it's where I think, Mark, your frame of reference here is great. Rule of thumb, you know, kind of probably $20 million-$30 million of expense headwind in the first quarter here.
Mm-hmm.
you know, hopefully that, as Mark said, that kind of gets covered with the fuel surcharge revenue that picks up in the-
Second
second quarter.
Right. You know, as I think about it over the course of the year, we don't know how long this lasts, obviously, okay? Let's just say it lasts for a while. The Strait of Hormuz kind of stays fluid. You know, natural gas becomes a little bit of an issue coming out of there. What does that do to U.S. nat gas prices? You know, you start seeing more export there. We move nat gas, but on top of it, when nat gas is high, it's pretty good usually for coal.
Mm-hmm.
Our coal franchise, our utility franchise. You'll see the utilities burn more coal. That's not a bad thing for the business volumes. On top of that, I mean, fuel stays high, you know, that puts a little pressure on trucking, doesn't it? On the intermodal space, it starts to maybe put pressure on truck rates, which is a pretty good thing for us. We've been pretty depressed for a while. We'd love to see some evacuation of capacity in trucking. Maybe this helps accelerate the evacuation of some of the smaller players who can't sustain the fuel spikes. We think that's another potential good news item for us on the intermodal side.
You know, you play this out, you know, you can see a lot of good, but depending on how long this lasts, obviously high fuel prices can have an adverse impact on the consumer. Ultimately, it'll lead to inflation. We don't know what it does to demand, and if there's demand destruction, that ultimately impacts an offsetting counter.
Right
... weight to our volumes in the future. You got all those things you kinda gotta put in the mix master.
Yeah.
Okay. Would you add anything?
No, I was just gonna say, I mean, you kind of saw that exact same, you know, experience back in 2022 with the Russo-Ukrainian War. You know, that six-month spike in
Yeah
in prices that really started to impact the economy. Obviously, a lot of other things going on at that time that are very different than now.
Mm-hmm
You know, just kinda have to wait to see how that shakes out.
One thing on the fuel side, you know, Norfolk, in my time covering the company, has historically been viewed as, like, less efficient in terms of fuel for a number of different reasons. I think in the last year has really materially changed and improved.
Yeah.
You know, that didn't go unnoticed by us in particular, but like, what really drove such a big gain, and is there still more room, you know, for improvement now they've kind of broken through that at least perceived threshold? I'll start. I think, you know, first thing, we've been talking about it for five years since I came six years ago. We've been investing more and more in modernizing our locomotive fleet-
Mm-hmm
... from DC technology to AC technology, which has significant advantages in terms of fuel efficiency. As we penetrated from what was below 30% AC in our fleet to now in our active fleet, what are we? Over 70%.
Yeah. Yep. We just finished our thousandth locomotive that we converted from DC to AC.
That's paying the dividends that we talked about when we were making those investments. That's a big driver. On top of it, I think you've got to give a lot of credit to our operations folks, where this is an obsession. There's a lot of other little disciplines that they're doing.
That's right.
Managing HPT, and trying to drive every last drop of fuel productivity without compromising speed, and some of the other tricks that you can do to optimize it on the short term. I will say, trying to get to a fuel efficiency of 1.05 years ago, I heard every story in the book about how impossible that was by our ops teams back then. You know, we have a unique network. We can never get to that, even though the other guy was there, close to there. You know, we have too much rise and fall. We have too much curvature. Obviously, we have an adverse locomotive mix, which we did resolve, but we would never be able to get all the way down to a 1.0, not even close. Well, here we are.
It's really good to see and very gratifying.
Yeah. I mean, we're, you know, finished the year at a 1.03, 5% improvement over the prior year, and we've got more improvement baked into the plan this year, so.
it's been frustrating because, you know, that great fuel efficiency we had last year, right, it's kinda wasted when fuel prices are so low. Now when fuel prices spike like this, we get the advantage of that great fuel efficiency. There we go. Well, Jason, you've been talking about, and the industry has, talking about more inflation, you know, to start the year, which is probably.
Yeah
not too surprising, but maybe for some, a little bit more unexpected. One of the areas I wanna ask you about is just for the merger review, and it seems like maintaining good, excellent service is kind of a prereq. The thought is it, you have to maintain like a higher level of staffing to put more buffer and resiliency in the network. I don't know if that's necessarily true or not. I mean, I don't think we can even see the headcount from the STB because they're quasi shut down.
Right
right now. Would you agree with that, you're running with a little bit, you know, heavier than normal to kind of keep that buffer for the next-
I mean.
year or so?
For sure, you know, during this period, safety is always critically important and will continue to be in service. You know, we have to maintain this extremely high level regardless of the merger, right? I mean, we need that. Our customers are demanding that.
Mm-hmm.
Those are two critical things for us. I think if you think about pure headcount, the way we're really looking at it is, we plan to be kind of flat to down with last year. We have some hiring that we need to do in certain locations on the T&E side, but it's really for attrition, not for growth. We've got a lot of capacity to grow with our current levels. We don't talk about it a lot. We talk about the T&E productivity, but if you look at our salaried workforce over the last two years, we're down low double digits in that workforce. That's again, really, trying to drive efficiency and productivity throughout the organization.
You know, the bigger, I think, lever is kind of on the T&E side. You know, it's really just hiring for attrition and trying to maintain this consistent service product. When the volume comes, you know, we're ready to handle it. We got a lot of latent capacity on the network.
Yeah, I think you'll probably see it like last year, a little bit of leakage on the T&E side. You know, while volumes may be in kind of that flattish range, you know, you'll probably see net leakage a little bit that really translates into the productivity that we have. I wouldn't say we're deliberately trying to keep a buffer.
Okay
on the network. I think generally we drive more efficiency and productivity every year so we can absorb a little bit more attrition. When volumes come, then you probably need to be adding a little bit more. Every railroad's gonna keep a little bit of buffer to make sure that you're resilient, and Jim even talks about that at UP.
Yeah
with, you know, despite how low his Operating Ratio is, you know, with all that length of haul advantage they have and scale advantage, you know, they talk about that too. I mean, that's just smart railroading. You've got to be able to recover when you have a bump in the night.
The key is really just keeping that trainee pipeline going. You know, that's something that we found out, you know, a couple years ago, the hard way.
Right.
You cut that off, it takes a very, very long time to rebuild that back up.
Right. That's a good point. Mark, just in terms of the merger itself, you've been talking to Jim and team for a while now. Just be curious to hear your thoughts, like at this stage, you know, what have you learned, you know, different that's maybe a little bit more exciting or opportunities that you didn't quite fully appreciate when this conversation was first starting? You know, I think what's been kind of refreshing and interesting is when you look at the cultures. I mean, we're obviously two very different railroads that came up with different histories. You know, we are a roll-up of, gosh, probably 100 different railroads over the past 200 years.
Norfolk Southern was born in 1982 with the combination of Norfolk and Western Railway and Southern Railway Company that had very different cultures, and they came together under the Thoroughbred brand, and very effectively. Where Union Pacific was created in basically 1862 by Lincoln with the vision to become a transcontinental railroad. You know, obviously, we're looking to try to fulfill that dream. When you start to bring the teams together, you know, there's limits to what we can do right now, because we're not gonna cross lines and gun jumping and all of that. We can start to benchmark a little and start to work on, obviously the application together. Then we work on integration planning together. Not integration work, but integration planning.
You start to see that at the core, they're railroaders on both companies. You've got a great Southern culture at Norfolk Southern. You've got a great Midwestern culture. Those are two great cultures that our country has, of people who are considerate. They're kind, they're respectful of one another, and they're working on trying to truly benchmark objectively what the best from each place is. That's been kind of encouraging. I just had a call this morning to get an update on kinda where the integration planning is. You were on it with us, Jason. Things are progressing really well. I'm encouraged by that. I really am, is how well the teams are working. I come from obviously spent 30 years in a different industry, more cutthroat industry, very acquisitive.
We did a lot of M&A. I did a lot of personal M&A. A lot of times you're buying competitors that have, you know, a hostile view of you and kinda businesses from adjacent industries. Trying to integrate those companies has been a challenge. This is different. You know, this is railroaders, and we're just bringing together and clicking the Lego set together to create something that covers the country compared to some of the stuff I've seen in the past in other industries. In fact, I spent more than six months of my career in Korea trying to integrate an acquisition from LG, the giant.
Mm-hmm.
Who, this was after the Asian financial crisis in 1998, wanted nothing to do with being merged with a Western company. Trying to carve out talent from that mothership who didn't really wanna leave the mothership to come be part of this big Western conglomerate was painful. It, you know, so I'm just encouraged because I come from a different vantage point, that I've seen what hard is. I've seen, you know, how challenging integrations can be or marriages can be, and this is something that I think is almost like a LEGO set.
A big part of the Lego set coming together, you know, a big reason for it, part of the thesis at least is, truckload conversion.
Yeah
you know, over time.
Right.
As you know, in the past, that's not really how it's worked out in the industry.
Sure
for a bunch of different reasons, some of which we already talked about. I guess, and we've seen with CPKC, like they've fallen short of their goal as well. Like, how is this time different? I guess, do we really need this new Lego set to really drive this type of growth for the industry overall and obviously for this combination?
You know, I've spent the better part of a year thinking, actually, since I joined the industry five years ago, trying to understand why we can't grow as an industry and what is the unique obstacle? For the early part, all I heard was just you need better service, consistent service, and then customers will come to you. Well, it's true, we hadn't always provided that, and we haven't always been reliable. But when we started to provide it, you know, you get a little bit that come back to you, but you realize that it's not coming at you in waves. It really isn't, that there's something else there. When you start to talk to customers instead of just your staff to understand why, you know, they start giving you the real answers, which is just truck is just so much easier. It's so much more convenient.
Yeah, you know, I know I got to pay 10, 15% more, but I can go nonstop service, and I can have visibility of my shipment throughout the journey. Where with you guys, you have to interchange it with somebody else. I don't have visibility, you know, and it's. I lose time in the middle, and it's just painful. When you start to understand that, and then you look and you know, I've kind of done a lot of analysis on this. You look, and you say, "Hmm, okay." Over the past 20 years or so, U.S. railroad volumes are down double digit, okay? Canadian railroads are not. You know, one has grown, the other's, you know, grown modestly.
Aside from having a transcontinental railroad in Canada and the pleasure of coming in and competing in the U.S. as well, and in one case, going all the way down to Mexico, what else is different? Well, the U.S., you know, we've got these artificial barriers that were created in 2000 when we consolidated the industries post-Staggers Act from 80 to 2000. We've kind of frozen time, all that consolidation, which, by the way, spurred tremendous growth in this industry. From 1980 through 2000, as we were consolidating, it spurred growth and a revival of health of the U.S. railroads because they were all failing. They had bad safety records, and they were financially failing. You allow that consolidation to happen, benefit from the economies of scale, volumes went up, rates actually went down, okay?
Then we snapped the line because integrations got screwed up by the railroads. In 2000, the regulators understandably said, "All right, no more. Moratorium in place." Then they rewrote those rules, and now we're frozen in time with 2 in the east, 2 in the west. I'm telling you, that watershed in the middle, that interference that's been created on the Mississippi River is the reason why I think it's the biggest impediment for why we can't grow. It's the obstacle, and that's what I hear from customers, too. It's not just instinct. That's why I think that this is different. CPKC truckload conversion, look, I don't know the details. I don't think it's an apples to apples comparison. I mean, it's largely they're North, South, and-
Mm-hmm.
You know, they've got different dynamics at play for sure.
Right.
What we're talking about, you know, intra watershed, you know, if you're trying to move product 100 miles east of the Mississippi to 100 miles west of the Mississippi, rail is not even in the thought process because you're gonna have an interchange that's gonna take 24-48 hours of extra time. And those costs are gonna be significant. Now you break that down, and you create this fluidity of single-line service that CPKC talked about.
Mm-hmm.
You know, customers are 2-3 times more likely to use single-line service over just traditional rail as it is today. That's why I'm so convicted on this.
I was at the TPM Conference a couple of weeks ago, and one interesting thing I heard was this perception, at least, that if this merger would go through, that the West Coast ports would be net beneficiaries. I don't I guess because UP is technically the acquirer here. But, like, that seemed a little off to me, but I think it was maybe just people not knowing exactly where the freight would land and who would serve which port. Is that something I mean, there's so many stakeholders involved in this transaction, but how do you think about the ports and maybe in terms of reaching the watershed? You know, do you get there easier from one side or the other? And is it just more options? But it's, you know, it's another stakeholder group to manage.
Yeah. I would trust your instincts, Brian, because they're pretty good. I think the ports in general are gonna benefit.
Yeah.
All the ports in general are gonna benefit. Whether it's, you know, New York, New Jersey that we serve, down to Virginia, down to Savannah, to Charleston, to Jacksonville, all of those ports are gonna benefit from having deeper access to the west, okay? It's one of the things Jim and I talked about early on was, oh, you know, this is not some desire to take out the East Coast by owning an East Coast railroad. The railroads aren't the reason why steamship lines choose ports.
Mm-hmm.
Okay? The freight is gonna find the most frictionless way to move. You know, we're just gonna provide better optionality, deeper access into the nation from both sides, and frankly, okay, give us an option to now start bringing the U.S. freight that's currently going up to Canadian ports back to the U.S. Let's not forget that. There's a fair amount of freight that's being imported to the U.S. that comes via the Canadian ports. They have single-line service, and then they drop it down to the U.S. This is another area of opportunity, whether it's on the East Coast or on the West Coast.
How do you think technology, I mean, the rail industry isn't really known for being tech forward. Maybe that's putting it kindly. But can technology really play a differentiating role here in the integration, if it were to go forward because, you know, we still have, well, air brakes from the 1800s for good reason, but I think there's probably some room for this to improve. Could this be a catalyst for greater technology adoption?
Yeah, I mean, I think, you know, I think you're right. I think when you think of a railroad, you don't think of, you know, cutting-edge technology. I think there's a lot of things that we've done specifically. You know, you think about these our digital portals that we have where, you know, trains are going through at full speed, and we're taking, you know, thousands of pictures a second and identifying, you know, defects in that train or things that need to be fixed, it is cutting edge. You know, what we're doing, the algorithms that we've developed there, I think, you know, that's best in the industry there. I think that's an example. I know Mark's passionate about that.
He's seen, you know, has gone out and visited all these locations. I think, you know, there's other areas where we're using, you know, AI in other spaces in the business. I think it's, again, I know that's the perception, but I think that's changing in what we do. I also think that, you know, both entities, when you kind of move to the merger, I think we're both, you know, sophisticated technology organizations, and we've both been through, you know, different upgrades and things in the past.
I think those experiences that we've had are gonna help us when we do integrate and as we start working through in our integration planning, taking all those experiences that we've had and putting them, you know, specific to this to make sure that this goes as smoothly as possible.
You know, those portals are really remarkable. I mean, the concept's been around for a while, and taking photos of a moving train have been around for a while. What we're using are ultra-high speed cameras with stadium lighting that's getting images of trains at full speed with incredible resolution. We've written AI. Our data scientists have written algorithms that are able to take a standard image, this is what it should look like, and find exceptions in those images and highlight it. Immediately sends an alert before the train's even out of the portal, sends an alert to our wayside desk, who then validates that this is not a false positive, that, yeah, there's a missing cotter pin here and, you know, there's a dragging brake line and this and that.
We use our judgment as to, okay, that can wait till the next stop. It's not a critical issue. Or this issue, we gotta stop that train right away.
Mm-hmm.
It's really remarkable. We know our data scientists have written 85 different algorithms. The number keeps climbing as they get new ideas. They work really tightly. These aren't just data scientists sitting in a room. They're sitting in a room with mechanical experts who are telling them, "You know, it'd be great if we could see this." These guys and gals are learning the industry, and they're working hand in glove. You know, if you come to Atlanta again, we'll show you the war room, and these guys will display to you exactly what they're doing. It's really neat stuff. That's why when you look at our accident rate, single biggest driver why our accident rate has plummeted and our main line accident rate leads the industry, two years in a row now. It's pretty exciting stuff.
That said, I'm more excited about what AI is gonna be able to do for us in the future.
Mm-hmm.
I mean, you can think about using AI to really help us optimize our train plans, right? Help us figure out how to get out when you have issues from weather or whatever, and you're out of balance, how to help us find solutions. There are judgments being made, distributed throughout this organization every day to try to resolve unique circumstances. But not everyone has the training to use the right judgment.
Mm-hmm.
You know, you have a fair amount of turnover, so that legacy knowledge is really important to kinda capture. If you can start capturing that using AI and have quicker, faster real-time solutions, you can do exciting things, I believe. I think that's another reason why I do think growth in this industry is, you know, between the merger and the advanced use of technology, we can start providing meaningful advances. I think it's critical because we're also fighting against a trucking industry that is advancing using technology.
Mm-hmm.
including autonomous vehicles, right? We have to have some level of modal equity here. Let us use this technology to advance us. Let us merge because we're competing against trucking, which is unencumbered by those restrictions.
We'll be talking to one of them later today.
All right. Ask him about it.
We'll do. Well, I'll take you up on that war room visit to see the pictures, for now, we have to wrap it there. Thanks, Mark. Thanks, Jason.
Thanks.
Appreciate it.
Appreciate you guys coming today.
Thanks for having us.
Thank you